Gallagher freezes pension plan; Brokerage joins exodus from defined benefit plans to 401(k).(News)(Arthur J. Gallagher & Co.)(Brief Article)

Business Insurance, August, 2005 by Geisel, Jerry

Byline: JERRY GEISEL ITASCA, Ill.-Another major employer is phasing out its defined benefit pension plan in favor of an enriched 401(k) plan. Arthur J. Gallagher & Co. froze its $137 million pension plan last month, with employees no longer earning new benefits. Effective Jan. 1, 2006, Gallagher will sweeten its 401(k) plan, with the company matching 100% of employees' salary deferrals, up to the first 5% of pay.

Gallagher now matches 50% of employees' pretax contributions, also up to the first 5% of pay. A spokesman for Itasca, Ill.-based Gallagher, the world's fourth-largest insurance broker, said the move was driven by several factors, including cost savings and a desire to end its exposure to defined benefit plan contribution volatility. In a...

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